FTSE Russell

Blog | Then and now: Dramatic US economic shifts

Service sectors now outweigh manufacturing sectors by about three to one. What more can the Russell 3000 tell us about economic change?

The primary objective of the Russell US Indexes is accurate representation of the US equity market, which is itself a reflection of the US economy. As such, the economic sector weights for the Russell 3000 confirm a stark reality; a massive shift in the nature of the US economy over the last half century.

In this paper, FTSE Russell looks at the evolution and characteristics of the Emerging Market (EM) fixed income asset class, since the 1980s, drawing on FTSE Russell data. It finds EM fixed income is now a substantial and investible asset class and very different from the asset class that suffered major dislocation in 1997-98, with little contagion in recent years.

Forward PE multiples have fully recovered from their March lows, with most now at or approaching their highest levels of the past five years. The bounce has been particularly striking for the US large-cap Russell 1000, which has climbed more than 600 basis points to around 20× (a 15-year high), and for the FTSE Europe, up more than 500 basis points. The Russell 1000 multiple retains its sizable premium to those of its developed peers, which have converged around 14-15×.